Background
As previously announced, on January 31, 2014, BATS Global Markets, Inc. (“BATS”) and Direct Edge Holdings LLC merged. In accordance with the terms of the transaction agreement, EDGA Exchange, Inc. (“EDGA”) and EDGX Exchange, Inc. (“EDGX” and, together with the EDGA, the “Exchange”), as well as Direct Edge ECN LLC d/b/a DE Route (“DE Route”), each became wholly owned subsidiaries under a single new holding company. In conjunction with the transaction, the new holding company changed its name to “BATS Global Markets, Inc.” (“BGM”) and BATS changed its name to “BATS Global Markets Holdings, Inc.
The purpose of this Notice is to notify parties to Exchange User Agreements and/or DE Routing Agreements (each defined below) of certain amendments to such agreements and the assignment of the DE Routing Agreement to BATS Trading, Inc., a wholly owned subsidiary of BGM (“BATS Trading”). As explained in further detail below, Users are not required to re-execute any documents or take any other action in order to effectuate the actions described in this Notice.
Technology Integration
The combined company plans to migrate EDGA and EDGX to BATS technology on January 12, 2015, at which point the Direct Edge technology will be retired and there will be one common technology platform across all four exchanges owned by BGM – EDGA, EDGX, BATS Exchange, Inc., and BATS Y-Exchange, Inc. (the “Technology Integration”).
Amendments to the EDGA and EDGX User Agreements
As part of the integration efforts of BATS and Direct Edge, BATS and Direct Edge seek to have Users of all four exchanges owned by BGM governed by a uniform User Agreement for each exchange. This Notice is being sent pursuant to Section 25 of the EDGA Exchange, Inc. User Agreement and/or EDGX Exchange, Inc. User Agreement (collectively, a “User Agreement”) to notify each User under a User Agreement of certain amendments to the User Agreement (the “User Agreement Amendments”), effective as of the later of (i) January 12, 2015, and (ii) BATS’ announcement of the completion of the Technology Integration (the “Effective Date”).
If your firm has already executed a User Agreement, there is no need to re-execute a new User Agreement to become subject to the User Agreement Amendments. However, if your firm desires to re-execute a User Agreement, please submit a new fully-executed copy of the applicable User Agreement to membershipservices@bats.com for each relevant exchange – EDGA, EDGX, or both.
Except as expressly provided herein, all of the terms and provisions of the User Agreement are and will remain in full force and effect and will be confirmed and ratified by the Exchange and User upon acceptance by User of the User Agreement Amendments. Download clean and marked copies of the User Agreement documents using the links below:
- Exhibit A-1: Clean copy of the EDGA User Agreement, as amended (also available on BGM's website).
- Exhibit A-2: Marked copy of the EDGA User Agreement, as amended.
- Exhibit B-1: Clean copy of the EDGX User Agreement, as amended (also available on BGM's website).
- Exhibit B-2: Marked copy of the EDGX User Agreement, as amended.
Amendments to the EDGA and EDGA Routing Agreements
In conjunction with the Technology Integration, DE Route will no longer act as an agent for Users for routing orders entered into the Exchange to the applicable market centers or broker-dealers for execution, whenever such routing is at User’s request (collectively, the “Routing Services”), and BATS Trading will act as agent for User to perform these Routing Services. In addition, as part of the integration efforts of BATS and Direct Edge, BATS and Direct Edge seek to have Users of all four exchanges owned by BGM governed by a uniform Securities Routing Agreement for each exchange.
The process outlined below to accomplish this goal is structured such that Users that are parties to a Direct Edge Securities Routing Agreement (the “DE Routing Agreement”) for EDGA, EDGX, or both, will not be required to take any action to effectuate the amendment and assignment of the DE Routing Agreement.
This Notice is being sent to notify each User under a DE Routing Agreement of the following actions, each of which shall become effective concurrently as of the Effective Date:
- Step #1 – Amendment of the DE Routing Agreement: Pursuant to Section 16 of the DE Routing Agreement, Direct Edge will amend the DE Routing Agreement to reflect BATS Trading as the agent for User for the provision of Routing Services for EDGA and EDGX and to make other non-material, clean-up changes.
- Step #2 – Assignment of the DE Routing Agreement: Pursuant to Section 13 of the DE Routing Agreement, DE Route will assign all of its right, title and interest in and to the DE Routing Agreement to BATS Trading, and BATS Trading will agree to assume all of DE Route’s duties and obligations under the DE Routing Agreement. As a result of this assignment and assumption, the DE Routing Agreement for EDGA and EDGX will be retitled as the “BATS Trading, Inc. Securities Routing Agreement”.
As noted above, effective as of the Effective Date, DE Route will be making certain amendments to the DE Routing Agreement (collectively, the “DE Routing Agreement Amendments”) to reflect BATS Trading as the agent for User for the provision of Routing Services for EDGA and EDGX and to make other non-material, clean-up changes. This Notice is being sent pursuant to Section 16 of the DE Routing Agreement to notify each Data Recipient of the DE Routing Agreement Amendments. Pursuant to the DE Routing Agreement, any use by a User of the Routing Services provided by BATS Trading after the Effective Date shall be deemed acceptance by the User of the DE Routing Agreement Amendments.
If your firm has already executed a DE Routing Agreement, there is no need to re-execute a new BATS Trading Securities Routing Agreement to become subject to the DE Routing Agreement Amendments. However, if your firm desires to re-execute the BATS Trading Securities Routing Agreement, please submit a new fully-executed copy of the BATS Trading Securities Routing Agreement to membershipservices@bats.com.
Except as expressly provided herein, all of the terms and provisions of the BATS Trading Securities Routing Agreement (formerly the DE Routing Agreement) are and will remain in full force and effect and will be confirmed and ratified by BATS Trading and User upon acceptance by User of the DE Routing Agreement Amendments. Download clean and marked copies of the BATS Trading, Inc. Securities Routing Agreement using the links below:
- Exhibit C-1: Clean copy of the BATS Trading, Inc. Securities Routing Agreement, as amended (formerly the DE Routing Agreement for EDGA) (also available onBGM's website).
- Exhibit C-2: Marked copy of the BATS Trading, Inc. Securities Routing Agreement, as amended (formerly the DE Routing Agreement for EDGA), is attached as Exhibit C-2.
- Exhibit D-1: Clean copy of the BATS Trading, Inc. Securities Routing Agreement, as amended (formerly the DE Routing Agreement for EDGX), (also available on BGM's website).
- Exhibit D-2: Marked copy of the BATS Trading, Inc. Securities Routing Agreement, as amended (formerly the DE Routing Agreement for EDGX)